World Cup and Olympics can also provide reputational benefits.

Many have criticized mega-events such as the Olympics and World Cup. Critics argue that the events create huge public debt that takes decades to recoup. Data vindicate these critics — but also show that other factors determine an event's effectiveness. Usually, poor returns derive from mismanagement and ill-considered investments, and not from hosting the event per se.

While mega-events can involve colossal facilities of little use post-event, they can also provide reputational benefits and be seen as an investment in a nation's brand.

Beijing, for example, viewed its massive Olympics investments in 2008 as a way to build people's skills, including English-language fluency, and to cultivate a service culture.

Strong nation-branding boosts trade and investment. In a 2009 paper, economists Andrew Rose and Mark Spiegel determined that going through the Olympics' bidding process resulted in a permanent 30% increase in national exports. It signaled to domestic and international interests that nations sought economic and trade liberalization, resulting in greater growth.